Former Fannie, Freddie Execs Charged With Securities Fraud

[mandym]

Six former executives at Fannie Mae and Freddie Mac have been charged by the Securities and Exchange Commission with lying about the two housing entities’ exposure to high-risk subprime mortgage loans just ahead of the 2008 financial crisis.

The SEC is alleging that as the U.S. housing bubble was losing air between 2006 and 2008, these top executives – three at Fannie Mae and three at Freddie Mac – knowingly allowed the two publicly traded entities to make false statements regarding their holdings of loans made to borrowers with bad credit.

They lied, according to the SEC’s complaint, in order to mislead investors and prop up Fannie and Freddie’s stock price. At the time, both entities were backed by the U.S. government but their stock was traded in public markets.

Read more: http://www.foxbusiness.com/industri...curities-fraud/?test=latestnews#ixzz1gjCugpSf

 

[marke]

Read more: http://www.foxbusiness.com/industri...curities-fraud/?test=latestnews#ixzz1gjCugpSf

This is a very good post. Democrats have long blamed Pres. Bush for the meltdown when policies out in place by Congress in Fannie and Freddie have been the most responsible for the problems of any parties involved. It was the passage of the 'Community Reinvestment Act' during the Carter Administration that laid the foundation which later brought down Wall Street.

Congress, in a poorly conceived plan developed for the purpose of solving social inequities, ended up mandating lower lending standards for minorities, allowing high risk loans to be processed through Fannie and Freddie, giving lenders and investment firms the false illusion that the govt was backing these rotten loans.

Greed and corruption can usually be found underlying economic disasters, and this intense focus on Fannie and Freddie is most assuredly the underlying reason for Barney Frank's decision to get out of Congress. If any one man can be held to blame for this mess it is Barney Frank above all others.

Thanks for the post.